RISING VALUES

Auckland Star, Volume LXXII, Issue 291, 9 December 1941, Page 9

RISING VALUES

INVESTMENT YEAR i WAR EFFORT ASSISTED "During 1940 we experienced considerable fluctuation in prices, but markets during the past year have been steady with a general appreciation in values, particularly in Government ana municipal securities, preference shares and local industrials," said Mr. J. W. Frater, chairman, addressing members at the annual meeting of the Auckland Stock Exchange to-day. Mr. Frater referred to the success ■ of the voluntary loan of £10,000,000, i which had been oversubscribed. ' Investors as a whole were very 1 willing to respond, and in the face' ' of a certain amount of resentment over the compulsory loan the result '• was splendid. Mr. Frater added that apart from ' the war loan the main event during the year was the conversion in July of loans totalling £21,000,000. The conversion terms were fair and in line with ruling interest rates. Here responded splen- ' didly. The Minister of Finance was ' to be congratulated on the result, and with no further loans requiring 1 redemption in the meantime, the ; decks were clear for any new issues. ■ He hoped, however, these would be ' confined, as far as possible, to loans 1 for war purposes, and issues for local amenities cut down to requirements - for essential expenditure. During the past year nearly £8,000,000 was raised for national development—a : very large sum for a small commu- - mty, under present conditions. ' Gilt-Edged Demand j With deposit rates fixed at low levels greater attention had been ' given to Government and municipal securities, and prices during the year appreciated until the present return was from 3 per cent to 3i per cent, a reduction of at least i per cent during the year. Turnover in this section had been substantial, and would have been considerably larger if supplies of suitable securities had been available. Banking shares were the medium °i a f ? ir amount of attention, but showed no material advance in value during the year, Mr. Frater said. Taxation on these institutions was now assessed on a sounder basis* and this coupled with the statement by the Minister of Finance that a Government bank could not give better service than the trading banks, should keep the shares in favour with investors, as return at present prices was attractive. The Commonwealth proposals extending Government control caused a temporary weakness in the Sydney and Melbourne markets, but prices had now recovered. Insurance stocks, which fluctuated considerably last year, had been steadier with a marked improvement in values, particularly in the case of the two market leaders, New Zealand and South British, which showed substantial gains on the announcement of higher dividend payments. Dominion Shares Prosper Shares in companies connected with primary industries had produced satisfactory balance-sheets, and with prices for wool, meat, butter, etc. at steady levels these concerns could look forward to a continuation of profitable business. Shares in woollen mills were freely dealt in and stood at higher levels had proved of immense value to the had proved of immense value to the Dominion since the outbreak of hostilities, and had done splendid work in clothing the fighting forces. The restriction on dealings in Australian stocks, combined with the imposition of taxation by the Commonwealth and New South Wales authorities on overseas investors, had enhanced the demand for shares in local companies, and business had been spread over a wider field than "for many years, with many stocks coming in for attention which had been neglected. "Interest rates are now at a very low level, and to my mind cannot*go lower without inflicting serious hardship on a section of the community which has already suffered very seriously," Mr. Frater added. Concluding, Mr. Frater expressed appreciation of the courtesy received from the staff of the Reserve Bank. Members were also gratified that arrangements were made for Dominion holders to take advantage of the issue of new shares by Broken Hill Proprietary, Electrolytic Zinc, and Felt and Textiles, Limited. He expressed deep regret at the death of Lieutenant T. B. Wright, who was killed when gallantly leading his men into action in Crete. Two members, Messrs. A. W. Gillies and O. Gore Adams had also died, while Mr. S. H. Harrison had resigned. Messrs. P. C. Savage and G. P. Elliot j were on active service.